Schultz FUTURE INTERESTS Fall 2015
CLASSIFICATION OF INTERESTS
These are all at EPTL 6-4
Estate in possession (NY)
· Possessory estate? (common law)
o Fee simple absolute
o Fee simple determinable
· Non possessory estate
· Types of Estates
o Fee simple absolute
o Fee on limitation (fee simple determinable)
o Fee on condition
§ Subject to condition precedent (CP) or subsequent (CS) (NY doesn’t separate these)
o Life estate
o Estate for years
o Estate from period to period
o Estate at will
o Estate at sufferance
· 3 kind of future estates left in/retained by the creator
o Possibliity of Reverter
o Right of reacquisition
· One category of future etate created in favor of a person other than the creator namely the remainder, which the statute subdivides into 4 types, that are
o Indefeasibly vested
o Vested subject to open
o Vested subject to complete defeasance and
o Subject to a condtion precedent (aka nonvested)
§ Remember that in NY a shifting executory interest is now included within the category of remainders subject to a cp
· Question Track
o Is there a restriction on land use?
o IF it doesn’t think RAPL 1955 doesn’t apply
o What is the nature of the originating document? (Is it a deed or a will)
o What is the duration of the instrument?
o Fee on absolute or condition?
o Precedent or susbsequent?
o Fee on limitation?
o Or life estate?
o Is the measuring life the lifetime of the grantee or a life pur autre vie?
o What is the quality of the interest?
o Indefeasibly vested?
o Vested subject to open?
6-5.8: Heirs or distributes of the life tenant take as purchasers: to A for life remainder to A’s heirs
A. Common Law Concepts
1. Leonard v. Burr (NY/1858) (words of collateral/duration limitation): until = durational words of limitation
· Disposition: “to Ben Bailey and his heirs until the village of Gloversville incorporates”
· Holding: Construed by the court not as words of divesting condition subsequent but as words of durational limitation, marking the quantum of Ben's estate measured from creation ie as if Sidney Mills said “to BB and his heirs for this long”.
2. Brattle Square (Mass/1855) (words of conditional limitation): A conditional limitation is one under which general head or division may be comprehended every limitation which is to vest an interest in a third person, on condition, or upon an event which may or may not happen.
· Disposition: “to the deacons of the said church for the time being, forever, upon this expression condition and limitation……; and in the case [the condition is not met], I then declare this bequest to be void…., and the land revert to my estate, and I give the same to my nephew.”
· Overview: The testatrix gave the proprietors the house under a devise in the will, subject to a gift over to the heirs. Claiming that the taxes and expenses of maintaining the house were increasing, the proprietors filed a bill against the heirs, praying for leave to sell the house. The court entered a decree for the sale of the house and for a reinvestment of the proceeds of the sale for the purposes intended under the trusts declared in the will. A gift over to the heirs was an executory devise, void for remoteness. The estate did not pass to the heirs by virtue of a residuary clause, nor would it have vested in the heirs at law of the testatrix. The house was an estate in fee in the proprietors. The gift over was void, as a violation of the rule against perpetuities. Thus, the proprietors' title became absolute, as a vested remainder in fee in the proprietors. They held the house in fee simple, free from the divesting limitation.
· Holding: It creates an executory devise, a fee on limitation, and it is void under the RAP.
· Other rules?!: One of the tests by which to distinguish between estates in remainder and other contingent and conditional interests in real property, is, that where the event, which gives birth to the ulterior limitation, determines and breaks off the preceding estate before its natural termination, or operates to abridge it, the limitation over does not create a remainder, because it does not wait for the regular expiration of the preceding estate. Wherever the gift is of a fee, there cannot be a remainder, although the fee may be a qualified or determinable one. The fee is the whole estate. When once granted, there is nothing left in the donor but a possibility or right of reverter, which does not constitute an actual estate.
· More notes: Brattle square though also involves the church asking the court to waive the restrictions , they haven't breached yet, which is sort of analogous to our real property statutes and actions law 15 hundred and something. Which might be part of what she is trying to get across, that you should never breach first, always ask and attempt to get it constructed in a more favorable way.
· It's a fee on limitation as opposed to a fee on condition, which enables the court to strike down the restrictions as a violation of the rule against perpetuitues.
· Basically it's about how to distinguish between fees on condition and fees on limitations based on language of duration versus language of conditionality.
· Partly as shown by language such as “during such time as” . And at the time fees on limitation functioned as an executory limitation which shifted possesion from one person to a third party not the grantor.
· Whereas had the estate given the church been a fee on condition it would be a retained reversion in his estate, and thus not subject to RAP as it was retained and not created.
3. In Re Kemf’s Will (NY/1937-38) (words of condition precedent or condition subsequent): grantor’s intent shows if conveyance was condition subsequent or precedent.
· Dispo: the beneficiary “….when they arrive at 21 years of age respectively, but this legacy is made upon condition that said children shall be brought up and educated in the faith of and according to the Roman Catholic Religion, otherwise this paragraph….is void.” “….moneys so given….for their support, maintenance, and education, if necessary. Upon condition however that the conditions hereinbefore provided with reference to their religious training shall be faithfully observed and performed.”
· Analysis: So there’s at least one condition precedent because he’s not 21 at the time of the death. But what about the roman catholic issue?
o If it was cp he has to be raised that way before his inte
tion to obtain a judgment that the limitation or condition be governed by §1951 & 1953 IF the special limtaiton or condition susquent unreasonably limits the use and development of the land. BUT if the breach has already occurred, then the breacher can still bring the claim if the grantor hasn’t brought a claim for rentry within six months.
· 1955 [before or after 1958, but at least two years after conveyance]: If the conveyance was for benevolent, charitable, educational, public or religious purposes apply intent test. Did grantor intend to benefit the church with the substantial benefit of the land or just the land itself. If substantial benefit, can sell. If just the land itself, can’t sell. (i.e. did the person want to make a charitable gift, or just give the charity someplace to do charitable stuff)
o The grantor has to show in order to show right of reacquisition or possibility of revereter purpose was limited was to use of the land.
o The grantee wants to show that “no no no, our grantor didn’t just want to limit us to the use of the land, she wanted to benefit us to the value of the land”
· RPL Art. 10 Sec. 345 (Discharge of Ancient Mortgages): Required the recording of an intention to preserve possibilities of reverter and rights of re-entry which had been created prior to September 1, 1931. Under the statute, owners of these rights were required to record their intention to preserve on or before September 1, 1961, and to renew the recording every ten years. The law also provided that new restrictions would be recordable not less than twenty-seven years, nor more than thirty years after their creation.
2. First Congregational Church (NY/1969): (applies RAPL 1955, restriction was for land to benefit charity, not give use)
· Dispo: half acre deed to a church “to be used for the benefit of the New Village Ortho Cong. Church while that church shall continue to exist, but, should the aforesaid church become extinct the aforesaid property shall be appropriated to the use of the Am. Home. Missionary Society.
· Issue: Many years later the organization moved the church to a new location and wished to sell the original property. The organization entered into a contract to sell the property but the contract was subject to removal of the restriction. The organization filed an action under § 1955 to remove the restriction.
· Holding: The disposition of the gift says “to benefit” therefore, the purpose must have been for the monetary value of the property to be used for the benefit of the church. Therefore, it fell under the 1955 restriction, the restriction is removed, and AHM was not entitled to any compensation because the “benefit” was intended for First Cong.